Intraday strategy using Super trend
The next strategy that we are going to learn in this section is extremely powerful and works well in intraday trading, i.e., 'Intraday strategy using Supertrend.'
A very common problem with the intraday traders is which indicators work well for the intraday trades. There is no holy grail in the market. A trader should use technical analysis to identify trades based on different parameters. Super trend indicator is one such indicator used commonly due to its simplicity. It can give precise buy or sell signals in a trending market.
Moving average is another trend following indicator which defines the trend as well as give us precise entry and exit signals. Using both these indicators together, a successful trading strategy can be initiated.
This strategy basically comprises Super Trend and 5-20 EMA crossover. When the Super Trend turns green (i.e. Super Trend is below the price) and 5 EMA is above 20 EMA, a buy signal is generated. Similarly, when the Super Trend turns red (i.e. Super Trend is above the price) and 20 EMA is above 5 EMA, a sell signal is generated.
The chart above is Nifty. The buy signals are shown with the help of green arrows and the sell signal is shown with the help of red arrows. As you can see in the chart, you can really catch big moves based on this strategy and keep trailing stop loss with the help of Super Trend to protect your profits.